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A blog about migration, remittances, and development

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This blog is hosted by Dilip Ratha, lead economist at the World Bank. Its goal is to leverage migration and remittances for development.  
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"Guest Worker" - an oxymoron?

Submitted by Dilip Ratha on Fri, 07/03/2009 - 21:00

In many cultures, the term "guest worker" would be an oxymoron. Yet policy makers in both receiving and sending countries seem to like guest worker programs. The hope is that guest workers will fill labor shortage in the receiving countries, and at the end of an employment contract go back home with money and some new skills. There is also a belief that temporary migrants will remit more of their savings back home than migrants who plan to stay on in the destination country (often called the "host country", another oxymoron?).

Announcing the International Conference on Diaspora for Development, July 13-14, 2009

Submitted by Sonia Plaza on Mon, 06/29/2009 - 12:43

The Migration and Remittances team of the Development Economics and Prospects Group (DEPG) of the World Bank is organizing an International Conference on Diaspora and Development on July 13-14, 2009 in Washington D.C. You are invited to participate in this conference and join economists, policy makers and other colleagues in the discussions. 

The diaspora of developing countries can be a potent force for development for their countries of origin, through remittances, but more importantly, also through promotion of trade, investments, knowledge and technology transfers. The conference aims to consolidate research and evidence on these issues with a view to formulating policies in both sending and receiving countries.

New paths to funding: Performance-indexed bonds

Submitted by Dilip Ratha on Wed, 06/17/2009 - 17:42

As estimates of the financing gap in developing countries range from $350 to $635 billion, there are increasing efforts to find new sources and innovative ways to mobilize external financing.  In the latest issue of Finance & Development, Suhas Ketkar and I contributed an article, “New Paths to Funding," which discusses diaspora bonds, performance-indexed bonds and securitization of future remittances and export earnings as possible means for restoring, or starting, access of poor country borrowers to international capital markets.
 
New sources of financing include potential savings from reducing remittance fees. The G8 Global Remittances Working Group has set a 5X5 target - reduce remittance fees by 5 percentage points within 5 years - which could raise more than $15 billion additional, annual resource flows to developing countries. This objective got welcome support from the G8 Development Ministers Meeting in Italy last week. The Leading Group - a group of 55 countries that have come together to explore innovative financing for development - also discussed remittances and diaspora bonds in a meeting two weeks ago in Paris. 

EU just approved the Blue Card: Are there advantages for developing countries?

Submitted by Sonia Plaza on Wed, 06/10/2009 - 17:55

On May 25th, 2009, the European Council adopted the EU Blue Card directive which was initially agreed upon by the European Union’s interior Ministers under the European Pact on Immigration and Asylum in September 2008.

According to the directive, the Blue Card will attract high skilled workers from a third-country into the EU- member states’ labor market and will have a period of validity between one and four years depending on the contract.  The directive rules state that EU Blue Card holders will be treated equally with nationals of the member state issuing the Blue Card in certain areas such as working conditions, education, and a number of provisions in national law regarding social security and pensions. The card will also allow the visa holder to bring in family members with him or her in the EU country where the job is located.

International migration by men affects labor market participation by women at home

Submitted by Gero Carletto on Mon, 06/08/2009 - 13:13

While the beneficial impacts of migration and remittances on social welfare have been well documented, we know very little about the effects of migration--mostly by men-- on the local labor market behavior of women. To help address this gap, Mariapia Mendola (of the University of Milan) and I explored the gender aspects of migration and economic development in Albania over the past fifteen years. We decided to examine Albania during this period in greater detail because economic hardship during transition fostered massive migrant outflows, mostly to neighboring Greece and Italy. Also, male migration is an ordinary and widespread phenomenon in Albania.

Using unusually detailed international migration histories from the 2005 Albania Living Standards Measurement Survey, we found that Albanian households with family members (mostly sons and daughters) living abroad are less likely to have women in paid employment. However, male spouses with past migration experience exert a positive influence on female self-employment. The same effect is not seen for men when women migrate. Our findings suggest that over time, male-dominated, shorter-term migration may increase the income-earning opportunities for women at home.

Our working paper based on this research was published last month in the World Bank's Policy Research Working Paper series.

Finding ways to improve migration data

Submitted by Ani Silwal on Fri, 05/29/2009 - 14:55

A constant struggle facing researchers and policymakers tackling migration issues is a lack of good data. The Center for Global Development recently released “Five Steps Toward Better Migration Data,” an excellent report on concrete steps governments and non-governmental organizations can take in the short run to fill this gap. 

This report is particularly important in the context of a new round of census taking in 2010. The five recommendations are to: 

  1. Ask basic census questions and make the data publicly available; 
  2. Compile and release existing administrative data;
  3. Centralize labor force surveys; 
  4. Provide access to microdata, not just tabulations; and 
  5. Include migration modules on more existing household surveys.

Given the abundance of recommendations in the development industry, a laudable effort is the accompanying report card (PDF) which tracks countries’ progress with respect to the recommendations.

Event Announcement: The Impact of the Economic Crisis on Migration and Remittances, June 1, 2009

Submitted by Neil Ruiz on Thu, 05/28/2009 - 09:58

The Migration and Remittances Team of the Development Economics Prospects Group (DECPG) of the World Bank is organizing a brown bag lunch seminar on "The Impact of the Economic Crisis on Migration and Remittances" on Monday, June 1, 2009 from 12:00pm-1:30pm, at the Main Complex of the World Bank, 1818 H Street NW, Room MC5-100.  Two eminent scholars, Bimal Ghosh (Colombian School of Public Administration)  and Manuel Orozco (Inter-American Dialogue) will present their views on how the economic crisis is effecting migration and  remittances world-wide.  The event will be chaired by Dilip Ratha, Lead Economist, DECPG. 

This event is open to the public.  If you would like to attend the brown bag lunch seminar, please RSVP by emailing Claudia Carter at: ccarter@worldbank.org. 

 

Undocumented Immigration: restrict or liberalize?

Submitted by Neil Ruiz on Fri, 05/15/2009 - 17:52

In a recent seminar at the World Bank, Peter Dixon and Maureen Rimmer presented a paper titled "Illegal Immigration: restrict or liberalize?" showing that tighter border security and internal enforcement actually reduce the welfare for U.S. households; raise the wage rate of the undocumented migrants who remain; and generate dead-weight losses in the form of prosecution and prosecution-mitigating activities. More importantly, they explain that restricting the inflow of undocumented immigrants pushes U.S. workers towards low-paid, low-skilled jobs. 

On the other hand, legalization produces a strong welfare gain for U.S. households since the supply of immigrants (now guest workers) increases and their wage falls.  At the same time, the additional inflow of guest workers has a favorable effect on the occupational mix and average real wage rate of U.S. native workers, allowing native-born US residents to complete their education, enhance their skills, and move up the occupational ladder. 

The paper surmizes that legalization is good for America since it will eliminate smugglers fees and other costs related to illegal entry, and allow immigrants (the former undocumented immigrants) to be even more productive.  If we accept this model, this means that the best action for countries with large undocumented immigrants is to legalize them and to develop a comprehensive temporary worker program.

Mobile money comes to Bangladesh

Submitted by Sanket Mohapatra on Tue, 05/12/2009 - 11:21

Bangladesh seems on track to launch a mobile money transfer (MMT) service which could potentially reduce costs to 1 percent of the transfer amount. The project will be implemented by Grameen Phone (a subsidiary of Grameen Bank which has pioneered mobile access to rural areas in Bangladesh) and is being supported by the World Bank, according to India's Economic Times. 

There are two new innovations compared to other developing countries with successful MMT implementation: (1) This service is targeted primarily for cross-border transfers (estimated at $9 billion annually), unlike other countries such as Kenya and Philippines where MMT has been focused on domestic transfers, and (2) It will use a network of ATM machines, where recipients can withdraw the money instead of having to go to a designated agent.

Entering the cross-border market will require developing settlement systems between Grameen Phone and banks and money transfer operators in the major remittance-sources (including in the Gulf) and extensive cooperation between the respective central banks and banking supervisors. The success of this venture will serve as a useful pilot for other countries that are considering such cross-border transfers.

A commendable web anthology on remittances

Submitted by Dilip Ratha on Wed, 04/29/2009 - 18:44

I recently revisited the Social Science Research Council's (SSRC) Web Anthology on Remittances and Development, and was pleasantly surprised to find an excellent collection of research articles on this rather fast-growing topic. The articles are presented in a convenient format, organized under some broad themes such as concepts, methods, measures, determinants, uses, and impacts of remittances.

One area where more articles exist and can be added are those on remittance systems (by this I mean retail payment systems) and how they can be leveraged for accessing finance/capital at the household or institutional level. There could also be more articles on regulations - especially on anti-money-laundering/countering financing of terrorism - that affect remittance transactions.